RELATED PARTIES

SunEdison Bankruptcy

On April 21, 2016, SunEdison and certain of its domestic and international subsidiaries voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code (the “SunEdison Bankruptcy”). The Company is not a part of the SunEdison Bankruptcy and does not rely substantially on SunEdison for funding, liquidity, or operational or staffing support. The Company continues to participate actively in the SunEdison Bankruptcy proceedings, and the SunEdison Bankruptcy will continue to have a negative impact on the Company given its complex relationship with SunEdison.

During the SunEdison Bankruptcy, SunEdison has not performed substantially as obligated under its agreements with the Company, including under the Sponsorship Arrangement and certain O&M and asset management arrangements. The Company believes that the Sponsorship Arrangement comprises a single integrated transaction. The agreements comprising the Sponsorship Arrangement are set forth in separate documents and discussed individually in this Quarterly Report on Form 10-Q. However, the elements of the Sponsorship Arrangement are closely related and a default under one element may be a defense to, or excuse performance under, another element. SunEdison and its various stakeholders have expressed disagreement with this view of the Sponsorship Arrangements and can be expected to contest any such assertion in connection with the SunEdison Bankruptcy.

On March 6, 2017, the Company entered into a settlement agreement with SunEdison in connection with the SunEdison Bankruptcy and Merger Agreement (the “Settlement Agreement”). The Settlement Agreement was approved by the bankruptcy court overseeing the SunEdison Bankruptcy on June 7, 2017; however, its effectiveness is conditional on the completion of the Brookfield Transaction. The Settlement Agreement contains certain terms to resolve the complex legal relationship between the Company and SunEdison, including, among other things, an allocation of the total consideration paid in connection with the Brookfield Transaction and, with certain exceptions, the full mutual release of all claims between SunEdison and its affiliated debtors and non-debtors, on the one hand, and the Company and its subsidiaries, on the other hand. Under the settlement terms, following the exchange of all of its Class B shares in TerraForm Global, Inc. and the Class B units in Global LLC for Class A Shares, SunEdison will receive consideration equal to 25.0% of the total consideration paid to all of the Company's shareholders, reflecting the settlement of intercompany claims and cancellation of incentive distribution rights. The remaining 75.0% of the consideration will be distributed to existing Class A shareholders. In addition, upon the effectiveness of the Settlement Agreement, with certain limited exceptions, all agreements between the Company and its subsidiaries, on the one hand, and SunEdison and its subsidiaries, on the other hand, including the agreements comprising the Sponsorship Arrangement, would be terminated. There can be no assurance that the Settlement Agreement will become effective, and such failure may adversely impact the Company’s business. The foregoing description of the Settlement Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Settlement Agreement.

On July 28, 2017, the bankruptcy court overseeing the SunEdison Bankruptcy entered an order confirming a plan of reorganization for SunEdison (the “SunEdison Plan”). Among other things, the SunEdison Plan would further implement the settlements, releases and terminations contemplated by the Settlement Agreement. If the SunEdison Plan becomes effective, a reorganized SunEdison would emerge from the SunEdison Bankruptcy and operate outside of the supervision of the bankruptcy court. There are numerous conditions to the effectiveness of the SunEdison Plan, including the completion of the Brookfield Transaction, and accordingly there can be no assurance that the SunEdison Plan will become effective, and such failure may adversely impact the Company’s business. However, the effectiveness of the SunEdison Plan is not a condition to the completion of the Brookfield Transaction.

Transition Services Agreement

On September 7, 2017, the Company entered into a transition services agreement with SunEdison. Pursuant to the terms of this agreement, SunEdison will continue to provide the Company, on an interim basis, certain services that SunEdison has historically provided the Company. These services include, without limitation, services related to information technology, tax, human resources, treasury, finance and controllership. The Company will pay SunEdison certain monthly fees in exchange for SunEdison's provision of the transition services. In addition to the services provided by SunEdison, the transition services

agreement contemplates that the Company will provide certain services to SunEdison. These specific services will be determined based on the needs of the parties, and will be charged at rates consistent with past practice. The transition services agreement, and the parties' obligations thereunder, also applies retroactively to transition services provided from and after February 1, 2017, and terminated in accordance with the terms of the transition service agreement on October 31, 2017. The Company is currently negotiating an extension of the transition services agreement with SunEdison with respect to certain of the services provided thereunder, however there can be no assurance that the Company will be able to enter into this extension on acceptable terms or at all.

Management Services Agreement

Immediately prior to the completion of the IPO on August 5, 2015, the Company entered into a Management Services Agreement (the “MSA") with SunEdison. Prior to the IPO and MSA execution, amounts were allocated from SunEdison for general corporate overhead costs attributable to the operations of the Company. The general corporate overhead expenses incurred by SunEdison include costs from certain corporate and shared services functions provided by SunEdison and are reflected in the Company’s unaudited condensed consolidated statements of operations as general and administrative expense. The amounts reflected include (i) charges that were incurred by SunEdison that were specifically identified as being attributable to the Company and (ii) an allocation of applicable remaining general corporate overhead costs based on the proportional level of effort attributable to the operation of the Company’s power plants. These costs include legal, accounting, tax, treasury, information technology, insurance, employee benefit costs, communications, human resources, and procurement. Corporate costs that were specifically identifiable to a particular operation of SunEdison have been allocated to that operation, including the Company. Where specific identification of charges to a particular operation of SunEdison was not practicable, an allocation was applied to all remaining general corporate overhead costs. The allocation methodology for all remaining corporate overhead costs is based on management’s estimate of the proportional level of effort devoted by corporate resources that is attributable to each of the Company’s operations. The cost allocations have been determined on a basis considered to be a reasonable reflection of all costs of doing business by the Company. The amounts that would have been or will be incurred on a stand-alone basis could differ from the amounts allocated due to economies of scale, management judgment, or other factors.

Subsequent to the IPO and pursuant to the MSA, SunEdison agreed to provide, or arrange for other service providers to provide, management and administrative services including legal, accounting, tax, treasury, project finance, information technology, insurance, employee benefit costs, communications, human resources, and procurement to the Company. As consideration for the services provided, the MSA requires the Company to pay SunEdison a base management fee as follows: (i) no fee for 2015, (ii) 2.5% of the Company’s cash available for distribution in 2016, 2017 and 2018, and (iii) an amount equal to SunEdison’s or other service provider’s actual cost in 2019 and thereafter. All costs under the MSA are reflected in the Company’s unaudited condensed consolidated statement of operations as general and administrative expense, and the difference between actual costs and the fee paid pursuant to the MSA will be treated as an equity contribution from SunEdison. No cash payments were made to SunEdison for the MSA fees during the nine months ended September 30, 2017 or 2016. However, pursuant to the Settlement Agreement, the Company is required to reimburse to SunEdison for costs and expenses incurred by SunEdison for services that it performs for the Company. As of September 30, 2017, the Company had accrued $4.0 million related to services performed by SunEdison. Also pursuant to the Settlement Agreement, the Company performs certain services for SunEdison, and the Company is entitled to reimbursement by SunEdison for costs and expenses incurred by the Company for such services. As of September 30, 2017, the Company recorded an immaterial amount related to services the Company performs for SunEdison.

As a result of the SunEdison Bankruptcy, SunEdison has not performed substantially as obligated under the MSA, and as a result the Company has borne the actual costs of a substantial portion of the services that SunEdison was obligated to provide under the MSA. As discussed in Note 1 - Nature of Operations, on September 25, 2016, the Company filed its initial proof of claim in the SunEdison Bankruptcy case, which was amended on October 7, 2016. This proof of claim asserted claims based on, among other things, SunEdison's breach of the Sponsorship Arrangement between the Company and SunEdison, which included the MSA. The MSA will be terminated upon the effectiveness of the Settlement Agreement.

Included in general and administrative expense are costs incurred under the MSA and corporate allocations of zero for the three and nine months ended September 30, 2017, and $15.9 million and $39.1 million for the three and nine months ended September 30, 2016, respectively. General and administrative expense represents costs incurred or reimbursable by SunEdison for services provided to the Company pursuant to the MSA subsequent to the IPO and allocated to the Company in corporate allocations prior to the IPO.

Project Investment Agreement

Immediately prior to the completion of the IPO on August 5, 2015, the Company entered into the Project Investment Agreement with SunEdison. Pursuant to the Project Investment Agreement, SunEdison agreed to contribute to the Company certain projects, without further payment, once each project reached commercial operation. These projects include the 17.4 MW Del Litoral and 57.4 MW El Naranjal solar power projects in Uruguay, the 24.1 MW Bora Bora Poly wind power project in India, and the 17.8 MW NPS Star and 17.8 MW WXA solar power projects in Thailand. The NPS Star and WXA solar power projects reached commercial operation in December 2015 and were transferred by SunEdison to the Company in the first quarter of 2016.

On March 23, 2016, SunEdison and the Company entered into an amendment to the Project Investment Agreement which extended the contribution deadline for SunEdison to contribute the remaining projects pursuant to the Project Investment Agreement to July 31, 2016. As part of the SunEdison Bankruptcy, the construction on the projects was materially delayed and/or abandoned due to the lack of funding by SunEdison. There were material amounts of project costs and equity contributions for the Del Litoral and El Naranjal solar power projects in Uruguay that remained to be contributed by SunEdison in order to complete construction of these projects and disbursement of the project finance debt facilities. Additionally, SunEdison experienced delays in completing construction of the Bora Bora Poly wind power project in India, and the transfer of the project required project lender consent, which was not obtained. In light of the SunEdison Bankruptcy, the Company will not obtain these projects under the Project Investment Agreement and it will not obtain any substitute projects from SunEdison.

As discussed in Note 1 - Nature of Operations, on September 25, 2016, the Company filed its initial proof of claim in the SunEdison Bankruptcy case, which was amended on October 7, 2016. This proof of claim asserted claims based on, among other things, SunEdison's breach of the Sponsorship Arrangement between the Company and SunEdison, which included the Project Investment Agreement. The Project Investment Agreement will be terminated upon the effectiveness of the Settlement Agreement.

Interest Payment Agreement

Immediately prior to the completion of the IPO on August 5, 2015, Global LLC and Global Operating LLC entered into an interest payment agreement (the “Interest Payment Agreement”) with SunEdison, pursuant to which SunEdison agreed to pay an aggregate amount equal to all of the scheduled interest of up to $81.2 million on the Senior Notes until December 31, 2016 and up to an aggregate amount of $40.0 million in 2017, $30.0 million in 2018, $20.0 million in 2019 and $10.0 million in 2020, plus any interest due on any payment not remitted when due. SunEdison’s interest support payments due to the Company have been reduced by $2.9 million as a result of the $49.6 million of the Senior Notes that were extinguished under the open market repurchase program that began in December 2015 and continued through January 2016. SunEdison will not be obligated to pay any amounts due under the Senior Notes in connection with an acceleration of the payment of the principal amount of such indebtedness.

Upon expiration of the distribution forbearance period applicable to the Class B common stock that were issued to SunEdison at the time of the Company's IPO, Global LLC will be entitled to set off any amounts owing by SunEdison pursuant to the Interest Payment Agreement against any and all amounts owed by Global LLC to SunEdison under the distribution provisions of the Global LLC Operating Agreement, and Global LLC may pay such amounts to Global Operating LLC. For the three months ended September 30, 2017 and 2016, SunEdison paid Global LLC zero and $41.2 million, respectively, related to interest payments on the Senior Notes.

The Interest Payment Agreement terminates upon payment by SunEdison of all amounts owing thereunder. It may, however, be terminated prior to that by mutual written agreement of SunEdison and Global Operating LLC and will automatically terminate upon the repayment in full of the outstanding principal amount of the Senior Notes or a change of control of the Company, Global LLC or Global Operating LLC. The agreement may also be terminated at the election of SunEdison, Global LLC or Global Operating LLC if any of them experiences bankruptcy or insolvency. Any decision by Global LLC or Global Operating LLC to terminate the Interest Payment Agreement must have the prior approval of the Conflicts Committee.

On July 29, 2016, the Company received a notice from SunEdison purporting to terminate the Interest Payment Agreement. The notice alleges that SunEdison's bankruptcy permits termination as of right without following the bankruptcy procedures for rejection of executory contracts. Although the Company does not expect SunEdison to perform under the Interest Payment Agreement going forward, the Company is contesting the purported termination of the Interest Payment Agreement, believes that the termination notice is invalid, and is asserting a claim in the SunEdison Bankruptcy for the full amount of damages resulting from SunEdison’s breach of the Interest Payment Agreement.

As discussed in Note 1 - Nature of Operations, on September 25, 2016, the Company filed its initial proof of claim in the SunEdison Bankruptcy case, which was amended on October 7, 2016. This proof of claim asserted claims based on, among other things, SunEdison's breach of the Sponsorship Arrangement between the Company and SunEdison, which included the Interest Support Agreement. The Interest Support Agreement will be terminated upon the effectiveness of the Settlement Agreement.

Equity Interest Purchase and Sale Agreement for 425 MW India Projects

See Note 4 - Deposits for Acquisitions for information regarding the 425 MW India Projects.

Operation and Maintenance (“O&M”) and Asset Management Services

O&M services, as well as asset management services, were provided to the Company by affiliates of SunEdison pursuant to contractual agreements. Costs incurred for these services were zero and $3.8 million for the three and nine months ended September 30, 2017, and $3.9 million and $13.6 million for the three and nine months ended September 30, 2016, respectively, and are reported as cost of operations in the unaudited condensed consolidated statements of operations. These agreements were all terminated as of April 1, 2017.

Engineering, Procurement and Construction Contracts and Module and Tracker Warranties

SunEdison served as the prime construction contractor for most of the Company’s power plants that were acquired from SunEdison pursuant to engineering, procurement and construction contracts with the Company’s project companies. These contracts are generally fixed price, turn-key construction contracts that include workmanship and other warranties with respect to the design and construction of the power plants that survive for a period of time after the completion of construction. These contracts or related contracts (including O&M agreements) also often include production or availability guarantees with respect to the output or availability of the power plant that survive completion of construction. Moreover, the Company also generally obtained solar module and tracker warranties from SunEdison, including material and workmanship warranties and output guarantees, for those solar power plants that the Company acquired from SunEdison that utilized SunEdison modules or trackers, as applicable. The SunEdison Bankruptcy will likely reduce or eliminate the Company’s potential recoveries on claims under these agreements and warranties, and all such claims or potential claims will be released upon the effectiveness of the Settlement Agreement.

Due to/from SunEdison, net

Certain of the Company’s expenses and capital expenditures related to construction in process are paid by affiliates of SunEdison and are reimbursed by the Company to the same or other affiliates of SunEdison. As of September 30, 2017 and December 31, 2016, the Company owed SunEdison and its affiliates $9.8 million and $16.1 million, net, respectively.

Depending on the nature of the activity, amounts are either reflected in operating activities or as a non-cash addition to power plants included in Due to SunEdison, net. Additionally, SunEdison provided contributions to the Company in the form of stockholder loans. Related amounts have been recognized as additional paid-in capital as there is no expectation for the Company to repay SunEdison for the contributions related to stockholder loans. These contributions totaled $7.2 million and $37.6 million for the nine months ended September 30, 2017 and 2016, respectively.

Incentive Distribution Rights

Immediately prior to the completion of the IPO on August 5, 2015, Global LLC entered into the Fourth Amended and Restated Operating Agreement of Global LLC, which granted SunEdison 100.0% of the incentive distribution rights (“IDRs”) of Global LLC. IDRs represent the right to receive increasing percentages (15.0%, 25.0% and 50.0%) of Global LLC’s quarterly distributions after the Class A units, Class B units and Class B1 units of Global LLC have received quarterly distributions in an amount equal to $0.275 per unit (the “Minimum Quarterly Distribution”), and the target distribution levels have been achieved. As of September 30, 2017 and December 31, 2016, SunEdison held 100.0% of the IDRs. SunEdison has pledged the IDRs as collateral under its DIP financing and its first and second lien credit facilities and second lien secured notes. SunEdison has granted the Company a right of first refusal with respect to any proposed sale of IDRs to a third party (other than its controlled affiliates), which the Company may exercise to purchase the IDRs proposed to be sold on the same terms offered to such third party at any time within 30 days after it receives written notice of the proposed sale and its terms.

Initial IDR Structure

If for any quarter:


•	Global LLC has made cash distributions to the holders of its Class A units, Class B1 units and, subject to the Distribution Forbearance Period and the Subordination Period (as described below) provisions, Class B units in an amount equal to the Minimum Quarterly Distribution; and


•	Global LLC has distributed cash to the holders of its Class A units and Class B1 units in an amount necessary to eliminate any arrearages in payment of the Minimum Quarterly Distribution;

then, subject to the Distribution Forbearance Period provisions, Global LLC will make additional cash distributions for that quarter to holders of its Class A units, Class B units, Class B1 units and the IDRs in the following manner:


•	first, to all holders of Class A units, Class B1 units and Class B units, pro rata, until each holder receives a total of $0.3163 per unit for that quarter (the “First Target Distribution”) (115.0% of the Minimum Quarterly Distribution);


•	second, 85.0% to all holders of Class A units, Class B1 units and Class B units, pro rata, and 15.0% to the holders of the IDRs, until each holder of Class A units, Class B1 units and Class B units receives a total of $0.3438 per unit for that quarter (the “Second Target Distribution”) (125.0% of the Minimum Quarterly Distribution);


•	third, 75.0% to all holders of Class A units, Class B1 units and Class B units, pro rata, and 25.0% to the holders of the IDRs, until each holder of Class A units, Class B1 units and Class B units receives a total of $0.4125 per unit for that quarter (the “Third Target Distribution”) (150.0% of the Minimum Quarterly Distribution); and


•	thereafter, 50.0% to all holders of Class A units, Class B1 units and Class B units, pro rata, and 50.0% to the holders of the IDRs.

There were no payments for IDRs made by the Company during the nine months ended September 30, 2017 or the year ended December 31, 2016. As of September 30, 2017, there were no Class B1 units of Global LLC outstanding. The IDRs will be canceled upon completion of the Brookfield Transaction.

Distributions

The Global LLC Operating Agreement restricts distributions to holders of Class B units during the Distribution Forbearance Period and the Subordination Period.

Distribution Forbearance

During the Distribution Forbearance Period, the Global LLC Operating Agreement limits distributions of cash in respect of a specific quarter to Class B units as follows:


•	the Class B units were not, under any circumstances, entitled to receive any distributions through the end of 2016 (i.e., distributions declared on or prior to March 31, 2017); and


•	thereafter, until the end of the Distribution Forbearance Period, the Class B units will not be entitled to receive any distributions to the extent the holders of Class A units and Class B1 units have not received distributions in an amount equal to the Minimum Quarterly Distribution plus any arrearages in the payment of Minimum Quarterly Distributions from prior quarters.

The Distribution Forbearance Period began on the completion of the IPO and ends on the later of March 31, 2017 or the date that the Completed CAFD Amount (as defined in the Global LLC Operating Agreement), which approximates the sum of cash available for distribution to shareholders from contributed construction projects and completed acquisition projects from the Company’s IPO portfolio, exceeds the CAFD Forbearance Threshold (as defined in the Global LLC Operating Agreement), which equals $72.1 million. Because the Completed CAFD Amount has not exceeded the CAFD Forbearance Threshold by an amount in excess of $72.1 million, the Distribution Forbearance Period has not yet ended. Any distributions forgone by the holders of Class B units pursuant to the provisions in the Global LLC Operating Agreement relating to the limitations on distributions on the Class B units during the Distribution Forbearance Period will not be distributed to holders of other classes of units and will not constitute an arrearage on the Class B units.

Subordination Period

The Global LLC Operating Agreement provides that, during the Subordination Period, the Class A units and Class B1 units (if any) have the right to receive quarterly distributions in an amount equal to $0.275 per unit, which amount is defined as the “Minimum Quarterly Distribution,” plus any arrearages in the payment of the Minimum Quarterly Distribution on the Class A units and Class B1 units from prior quarters, before any distributions may be made on the Class B units. The Class B units are deemed “subordinated” because for a period of time, referred to as the “Subordination Period,” the Class B units are not entitled to receive any distributions from Global LLC until the Class A units and Class B1 units have received the Minimum Quarterly Distribution plus any arrearages in the payment of the Minimum Quarterly Distribution from prior quarters. Furthermore, no arrearages will be paid on the Class B units. The practical effect of the subordinated Class B units is to increase the likelihood that during the Subordination Period there will be sufficient cash available for distributions to shareholders to pay the Minimum Quarterly Distribution on the Class A units and Class B1 units. The subordination of the Class B units is in addition to the provisions in the Global LLC Operating Agreement relating to the limitations on distributions on the Class B units during the Distribution Forbearance Period described above.

The Subordination Period began on the completion of the IPO and continues until each of the following tests regarding distributions of cash available for distribution to shareholders and Minimum Quarterly Distributions is met, which will be a minimum three-year period ending no earlier than the beginning of the period for which a distribution is paid for the first quarter of 2018:


•	distributions of cash available for distribution to shareholders on each of the outstanding Class A units, Class B units and Class B1 units of Global LLC equaled or exceeded $1.1000 per unit (the annualized Minimum Quarterly Distribution) for each of the three consecutive, non-overlapping, four-quarter periods immediately preceding that date;

•

the cash available for distribution to shareholders generated during each of the three consecutive, non-overlapping, four-quarter periods immediately preceding that date equaled or exceeded the sum of $1.1000 per unit (the annualized Minimum Quarterly Distribution) on all of the outstanding Class A units, Class B units and Class B1 units of Global LLC during those periods on a fully diluted basis; and


•	there are no arrearages in payment of the Minimum Quarterly Distribution on the Class A units or Class B1 units of Global LLC.

The Subordination Period may terminate early if each of the following tests is met:


•	distributions of cash available for distribution to shareholders on each of the outstanding Class A units, Class B units and Class B1 units of Global LLC equaled or exceeded $1.65 per unit (150.0% of the annualized Minimum Quarterly Distribution) for the four-quarter period immediately preceding that date;

•

the cash available for distribution to shareholders generated during the four-quarter period immediately preceding that date equaled or exceeded the sum of (i) $1.65 per unit (150.0% of the annualized Minimum Quarterly Distribution) on all of the outstanding Class A units, Class B units and Class B1 units of Global LLC during such four quarters on a fully diluted basis, and (ii) the corresponding distributions on the IDRs during such four quarters; and


•	there are no arrearages in payment of the Minimum Quarterly Distributions on the Class A units or Class B1 units of Global LLC.

Distributions during the Subordination Period

If Global LLC makes a distribution of cash in respect of any specific quarter ending before the end of the Subordination Period, the Global LLC Operating Agreement requires that it make the distribution in the following manner:


•	first, to the holders of Class A units and Class B1 units, pro rata, until Global LLC distributes for each Class A unit and Class B1 unit an amount equal to the Minimum Quarterly Distribution for that quarter and any arrearages in payment of the Minimum Quarterly Distribution on such units for any prior quarters;


•	second, subject to the provisions in the Global LLC Operating Agreement relating to the limitations on distributions on the Class B units during the Distribution Forbearance Period, to the holders of Class B units, pro rata, until Global LLC distributes for each Class B unit an amount equal to the Minimum Quarterly Distribution for that quarter; and


•	thereafter, in the manner described above under Incentive Distribution Rights.

Support Agreement

Immediately prior to the completion of the IPO on August 5, 2015, Global LLC entered into a project support agreement with SunEdison (the “Support Agreement”). Pursuant to the Support Agreement, SunEdison granted the Company call rights with respect to projects identified therein by SunEdison (“Call Right Projects”) that had an aggregate net nameplate capacity of 1.6 GW (or reasonably equivalent projects), and SunEdison was contractually required to offer Global LLC additional qualifying projects through the fifth anniversary of the completion of the IPO that were projected to generate an aggregate of at least $1.4 billion of cash available for distribution during their respective first twelve months of commercial operation. At the time of the IPO, SunEdison had pending agreements with third-party developers to acquire clean energy projects that had an aggregate capacity of 4.2 GW, which were expected to be added to the call rights list under the Support Agreement. In addition, the Support Agreement granted Global LLC a right of first offer with respect to any clean energy projects (other than Call Right Projects) (“ROFO Projects”) that SunEdison elected to sell or otherwise transfer during the six-year period following the completion of the IPO and that were located in the Company’s initial target markets and other emerging markets that the parties mutually agreed upon.

Following the SunEdison Bankruptcy, SunEdison breached the Support Agreement and the Company will not acquire any of the Call Right Projects or ROFO Projects. On September 25, 2016, the Company announced that as a result of SunEdison’s breach under the Support Agreement and other agreements constituting the Sponsorship Arrangement, the Company filed claims against SunEdison in excess of $2 billion. The claims include, without limitation, claims for damages relating to breach of SunEdison's obligations under the Sponsorship Arrangement and other agreements; contribution and indemnification claims arising from litigation; claims relating to SunEdison’s breach of fiduciary, agency and other duties; and claims for interference with and the disruption of the business of the Company, including the loss of business opportunities, loss of business records, failure to provide timely audited financials, and the increased cost of financing and commercial arrangements. Many of these claims are contingent or unliquidated; estimated amounts may change substantially as circumstances develop and damages are determined. Although SunEdison has not formally rejected the Sponsorship Arrangement, it has breached its obligations thereunder and the Company has additional claims for rejection damages.

As discussed in Note 1 - Nature of Operations, on September 25, 2016, the Company filed its initial proof of claim in the SunEdison Bankruptcy case, which was amended on October 7, 2016. This proof of claim asserted claims based on, among other things, SunEdison's breach of the Sponsorship Arrangement between the Company and SunEdison, which included the Support Agreement. The Support Agreement will be terminated upon the effectiveness of the Settlement Agreement.

Insurance Allocation Agreements

The Company, TerraForm Power, Inc., SunEdison and certain of their respective directors and officers shared $150.0 million of directors’ and officers’ liability insurance policies that covered the period from July 15, 2015 to July 14, 2016 (the “D&O Insurance”). SunEdison and the independent directors of SunEdison (the “SUNE D&O Parties”) entered into an agreement, dated March 27, 2017 and amended on June 7, 2017, with the Company, TerraForm Power, Inc. and their respective current directors and officers (the “YieldCo D&O Parties”) related to the D&O Insurance (the “First D&O Insurance Allocation Agreement”). Among other things, the First D&O Insurance Allocation Agreement provides that: (i) the YieldCo D&O Parties consent to a $32.0 million payment to SunEdison from the D&O Insurance in connection with the settlement of claims proposed to be brought by the unsecured creditors’ committee in the SunEdison Bankruptcy under a motion in the SunEdison Bankruptcy case for derivative standing; (ii) for a specified period of time, the SUNE D&O Parties and the YieldCo D&O Parties agree to cooperate in trying to reach settlements of certain lawsuits pending against the YieldCo D&O Parties arising from a variety of alleged prepetition actions and transactions, including, but not limited to, the Company’s initial public offering and other securities transactions, and SunEdison agrees to consent to such proposed settlements to be funded by up to $32.0 million from the D&O Insurance; and (iii) for a specified period of time, SunEdison, its independent directors, the Company and TerraForm Power, Inc. will not assert certain payment priority provisions of the D&O Insurance. On June 29, 2017, the bankruptcy court overseeing the SunEdison Bankruptcy entered an order approving the First D&O Insurance Allocation Agreement.

On August 31, 2017, the Company, TerraForm Power, Inc., SunEdison and certain of their respective current and former directors and officers entered into a second agreement related to the D&O Insurance (the “Second D&O Insurance Allocation Agreement”). Among other things, the Second D&O Insurance Allocation Agreement provides: (i) no party to the Second D&O Insurance Allocation Agreement would object to the settlement of the lawsuit captioned Chamblee v. TerraForm Power, Inc., (the “Chamblee Litigation”), with the use of $13.625 million of the D&O Insurance; (ii) no party to the Second D&O Insurance Allocation Agreement would object to the settlement of the derivative action on behalf of the Company captioned Aldridge v. Blackmore, et al., No. 12196-CB (Del. Ch.), which relates to the authorization of the advancement of $231.0 million to SunEdison for projects in India, with the use of $20.0 million of the D&O Insurance; (iii) the Company would have the full and exclusive right to an additional $20.0 million of the remaining limit of the D&O Insurance for use in its sole discretion; (iv) the Company and TerraForm Power, Inc. would also have access to an additional aggregate D&O Insurance payment of $435,000 for defense costs; (v) SunEdison’s current and former directors and officers would have the full and exclusive rights to the remaining limits of the D&O Insurance; and (vi) all parties to the Second D&O Insurance Allocation Agreement waived any right they might otherwise have under the D&O Insurance to request or instruct the insurers to defer or stop any insurance payments to which the Company is entitled under the Second D&O Insurance Allocation Agreement. On October 3, 2017, the bankruptcy court overseeing the SunEdison Bankruptcy entered an order approving the Second D&O Insurance Allocation Agreement. In connection with the Second D&O Insurance Allocation Agreement, the Company and TerraForm Power, Inc. entered into an agreement pursuant to which the Company agreed to indemnify and reimburse TerraForm Power, Inc. for certain costs, fees and expenses related to TerraForm Power, Inc.’s defense or settlement of the Chamblee Litigation that are not covered by the D&O Insurance.

Arrangements with TerraForm Power

In January 2017, the Company entered into a Use and Occupancy Agreement with TerraForm Power, pursuant to which TerraForm Power granted to the Company a license to use the office space in Bethesda, Maryland that is leased by TerraForm Power and is the shared corporate headquarters of the Company and TerraForm Power until the earlier to occur of June 30, 2018 and the termination of the underlying lease. The Company has agreed to pay TerraForm Power one-third of the rent and other amounts due to the landlord under the underlying lease, which is expected to be equal to an aggregate of $0.8 million in 2017, and certain additional service fees. For the nine months ended September 30, 2017, $0.6 million was accrued under this agreement.

TerraForm Power has entered into service contracts with various vendors for information technology and enterprise resource planning systems. The Company is not a party to any of these contracts and has no direct contractual liability to third parties thereunder, however the Company uses these systems in cooperation with TerraForm Power, and the costs of such systems will be allocated between TerraForm Power and the Company pursuant to an agreement that is expected to be entered into between TerraForm Power and the Company. As of September 30, 2017 and December 31, 2016, the Company capitalized $1.1 million and $0.4 million, respectively, of expenses related to development costs of the new enterprise resource planning systems, and the Company recognized less than $0.1 million as general and administrative expense related to these systems during the nine months ended September 30, 2017, and $0.1 million as general and administrative expense related to these systems during the year ended December 31, 2016. For the nine months ended September 30, 2017, no amounts were paid under this agreement.

In addition, certain employees of TerraForm Power provide general management services to the Company, and a portion of the costs associated with such employees is allocated to the Company. As of September 30, 2017, the cost to the Company for the services being provided to the Company by employees of TerraForm Power is $0.7 million.

The Company is currently negotiating a transition services agreement with TerraForm Power with respect to certain of these information technology and enterprise resource planning systems, as well as the services provided to the Company by certain TerraForm Power employees, however there can be no assurance that the Company will be able to enter into this agreement on acceptable terms or at all.

Settlement Agreement with Renova

On May 26, 2017, TerraForm Global, Inc., TerraForm Global, LLC, TerraForm Global Brazil Holding B.V. and TERP GLBL Brasil I Participacoes Ltda. entered into a Settlement Agreement and Mutual Release (the “Renova Settlement Agreement”) with Renova. The Renova Settlement Agreement resolves all disputes among the Company and Renova that are the subject of an ongoing arbitration proceeding in the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada (the “Renova Arbitration”). Pursuant to the Renova Settlement Agreement, the TerraForm Global Parties have agreed to make a one-time settlement payment in the aggregate amount of $15.0 million, in exchange for and contingent on the withdrawal with prejudice of all claims and counterclaims made in the Renova Arbitration and termination of the Renova Arbitration. In addition, 792,495 shares of TerraForm Global, Inc. Class A common stock issued to Renova and currently held in escrow pursuant to the acquisition agreements for the Salvador wind power plant acquired by a subsidiary of the Company will be returned to the Company. None of the parties to the Renova Arbitration has admitted to any wrongdoing or liability with respect to the claims asserted in the Renova Arbitration. Subject to the satisfaction of certain conditions set forth in the Renova Settlement Agreement (including the purchase of Renova’s shares of TerraForm Global, Inc. Class A common stock by an affiliate of Brookfield as described below), the parties have granted each other full releases with respect to any claims arising in connection with the previously completed acquisitions by the Company of the Salvador and Bahia wind power plants from Renova and all related transactions and any other disputes that could arise in the future among the TerraForm Global Parties and Renova concerning or related in any way to such transactions and events, which are the subject of the Renova Arbitration.

Concurrently with the execution of the Renova Settlement Agreement, Renova and Parent entered into a Purchase & Sale Agreement (the “PSA”) with respect to all of the shares of Class A common stock of TerraForm Global, Inc. owned by Renova (excluding the shares to be released from escrow to TerraForm Global, Inc. pursuant to the Renova Settlement Agreement). Pursuant to the terms of the PSA, an affiliate of Brookfield agreed to purchase 19,535,004 shares of Class A common stock of TerraForm Global, Inc. from Renova for a purchase price in cash of $4.75 per share, or $92,791,269 in the aggregate.

The effectiveness of the full releases contained in the Renova Settlement Agreement was subject to certain conditions set forth in the Renova Settlement Agreement (including, but not limited to, the execution and filing of a joint stipulation with the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada withdrawing with prejudice all of the claims and counterclaims made in the Renova Arbitration and the purchase of Renova’s shares of Class A common stock of TerraForm Global, Inc. by Parent). Additionally, the consummation of the share purchase contemplated by the PSA was subject to customary conditions to closing and was conditioned upon the satisfaction of certain conditions set forth in the Renova Settlement Agreement, including the effectiveness of the mutual releases and release of the shares in escrow.

The conditions to the effectiveness of the full releases in the Renova Settlement Agreement, as well as the conditions to the consummation of the share purchase contemplated by the PSA, were satisfied on June 29, 2017. As a result, on June 29, 2017, the Company made a one-time settlement payment to Renova in the aggregate amount of $15.0 million, 792,495 shares of TerraForm Global, Inc. Class A common stock issued to Renova were returned from escrow to the Company, the TerraForm Global Parties and Renova executed and filed a joint stipulation with the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada withdrawing with prejudice all of the claims and counterclaims made in the Renova Arbitration, the full releases provided for in the Renova Settlement Agreement became effective, and the share purchase contemplated by the PSA was consummated. The Company recognized $3.8 million of general and administrative expenses as of December 31, 2016 as a result of this settlement.

Also, concurrently with the execution of the Renova Settlement Agreement, TerraForm Global, Inc. and Parent entered into a letter agreement (the “Renova Letter Agreement”), pursuant to which Parent agreed that upon the later to occur of (i) the effective time as described in the Renova Settlement Agreement and (ii) the closing of the share purchase contemplated by the PSA (as defined and described below), the condition to the obligations of Parent and Merger Sub to effect the Merger set forth in Section 7.2(c) (Litigation Settlement) of the Merger Agreement, solely with respect to Renova’s claims in the Renova Arbitration, has been satisfied and the aggregate payment made by the Company (net of any amounts funded directly or indirectly by insurance proceeds) under the Renova Settlement Agreement in connection with the settlement of Renova’s claims in the Renova Arbitration will be deemed to be zero. This condition to the obligations of Parent and Merger Sub to effect the merger set forth in Section 7.2(c) (Litigation Settlement) of the Merger Agreement solely with respect to Renova’s claims in the Renova Arbitration was also satisfied on June 29, 2017.

Employment of Related Persons

Since December 2016, the Company has directly employed Al Dahya, the son of Hanif Dahya, a member of the Company's Board, as its Senior Vice President, Corporate Development and Strategy. Prior to December 2016, Al Dahya was an employee of SunEdison and was compensated directly by SunEdison. In the fiscal year ended December 31, 2016, Al Dahya received RSUs with a fair market value at the time of their granting of $63,400 as a retention payment from the Company pursuant to the Company’s general retention program implemented following the SunEdison Bankruptcy. Since his employment by the Company, Al Dahya receives a base salary of $260,000, and may be eligible to receive an annual bonus for the year ending December 31, 2017, additional retention payments and certain bonuses relating to the closing of the Brookfield Transaction consistent with the Company’s general employee compensation practices and programs.

Closing of TerraForm Power Merger and Sponsorship Transaction

On October 16, 2017, pursuant to the Merger and Sponsorship Transaction Agreement, dated as of March 6, 2017 (the “TERP Transaction Agreement”), by and among TerraForm Power, Inc., Parent and BRE TERP Holdings Inc., BRE TERP Holdings Inc. merged with and into TerraForm Power, Inc. (the “TERP Merger”), with TerraForm Power, Inc. continuing as the surviving corporation in the TERP Merger. Immediately following the consummation of the TERP Merger, Parent held 51% of the shares of Class A common stock of TerraForm Power, Inc. Pursuant to the TERP Transaction Agreement, at or prior to the effective time of the TERP Merger, TerraForm Power and Parent (or one of its affiliates), among other parties, entered into a suite of agreements providing for sponsorship arrangements. Following the closing of the TERP Merger, the directors and executive officers of the Company who previously also served as directors or executive officers of TerraForm Power now exclusively serve as directors and executive officers of the Company.

The closing of the TERP Merger resulted in the accelerated vesting of TerraForm Power, Inc. RSUs held by employees of the Company and of TerraForm Global, Inc. RSUs held by employees of TerraForm Power. In order to facilitate the payment of shares underlying the respective vested RSUs, TerraForm Power and the Company agreed that they would withhold from such payments a number of shares equal in value to the employee portion of all federal, state and local income and employment taxes to the extent such employees elected to pay such taxes through net share vesting. In order to facilitate the remittance of these taxes to the appropriate authorities, each of TerraForm Power and the Company further agreed to send a cash payment to the other, equal in value to the shares withheld. As a result of this arrangement, the Company received $0.3 million from TerraForm Power to cover applicable withholding taxes for the Company’s employees who held TerraForm Power, Inc. RSUs, and the Company expects to pay $0.8 million to TerraForm Power to cover applicable withholding taxes for TerraForm Power employees who held TerraForm Global, Inc. RSUs, which would result in a net cash payment from the Company to TerraForm Power of $0.5 million. The Company’s treasury received 150,933 shares of TerraForm Global, Inc. Class A common stock in connection with such withholdings.

Employment Agreement with Ms. Rebecca Cranna

On October 16, 2017, effective upon the closing of the TERP Merger, Ms. Rebecca Cranna, our Executive Vice President and Chief Financial Officer, became an employee of the Company pursuant to the terms of an employment agreement, dated October 6, 2017, between Ms. Cranna and the Company (the “Employment Agreement”). Prior to the closing of the TERP Merger, Ms. Cranna was an employee of TerraForm Power and was not directly employed by the Company. The Employment Agreement provides that Ms. Cranna will receive a monthly salary of $25,000 from the date of the closing of the TERP Merger until the termination of the Employment Agreement on December 31, 2017 (the “Termination Date”). Ms. Cranna and the Company may mutually agree to extend the Termination Date until the earlier of March 31, 2018 and the date of the closing of the Brookfield Transaction. The Employment Agreement also provides that Ms. Cranna will be eligible to receive a performance bonus of 60% of her annualized base salary, prorated based on the number of months worked under the Employment Agreement, less applicable withholdings. Payment of the performance bonus is subject to Ms. Cranna maintaining high performance and certain other customary conditions.